From local shops and design studios to contractors and coffee spots, there are millions of small businesses across the country. They create jobs, innovate, and contribute to the economy—but not everyone knows what defines a small business or how they can take advantage of the many resources available. From important definitions to expert growth tips, this guide has everything you need to know about small business.
Generally speaking, small businesses have fewer employees and lower revenue than large companies. However, the exact numbers and caps vary by industry, which is why the Small Business Administration sets size standards for each sector. Typically, a small business must have less than 500 employees or $5 million in annual revenue to be considered small in most sectors.
To qualify for certain government contracts, small businesses must also adhere to a specific North American Industry Classification System (NAICS) code. To find your NAICS code, go to the SBA’s NAICS Lookup Tool and select the industry you’re in. Then, look up the size standards for that sector to see if you’re eligible to sell to the federal government as a small business.
No matter the size or structure of your business, it’s essential that you make informed decisions about how to organize your company and legal responsibilities. You’ll want to consider a variety of factors, including tax implications and the ability to grow. No matter what you decide, it’s also essential to choose the right insurance coverage for your business. You’ll need general liability insurance, workers’ compensation, and perhaps other policies depending on your industry.
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